CORPORATE TREASURER DUTIES AND RESPONSIBILITIES

1. Forecast cash flow positions, related borrowing needs, and available funds for investment
2. Ensure that sufficient funds are available to meet ongoing operational and capital investment requirements
3. Use hedging to mitigate financial risks related to the interest rates on the company's borrowings, as well
as on its foreign exchange positions
4. Maintain banking relationships
5. Maintain credit rating agency relationships
6. Arrange for equity and debt financing
7. Invest funds
8. Invest pension funds
9. Monitor the activities of third parties handling outsourced treasury functions on behalf of the company
10. Advise management on the liquidity aspects of its short- and long-range planning
11. Oversee the extension of credit to customers
12. Maintain a system of policies and procedures that impose an adequate level of control over treasury
activities

Corporate treasurers play a vital role in improving and maintaining the financial standing of a company or organisation.
They are often responsible for:

determining financial strategy and policy;

advising on what businesses to invest in;

arranging appropriate funding;

managing financial risks in an organisation.

This is a varied and responsible role that ensures a company has the cash and liquidity to meet its obligations,
involving raising funds from banks, as well as debt and equity markets and, in some companies, actively trading in the
foreign exchange, commodity and money markets.
Other activities may involve dealing with property, taxation, insurance and pensions

Typical work activities

Five core treasury functions, in which treasury professionals may specialise are defined by The Association of
Corporate Treasurers (ACT) . These are:

capital markets and funding;

cash and liquidity management;

corporate financial management;

risk management;

treasury operations and controls.

Within these functions typical work activities may involve:

managing daily cash balances and trading in the financial markets;

ensuring that a company's cash flow is adequate to allow it to operate effectively;

forecasting cash payments and anticipating challenges arising from limited cash flow;

undertaking risk management activities to protect a company's financial well-being;

analysing the impact of financial markets on the performance of products or services;

making decisions on company finances, for example, the funding of company operations;

progressing specific financial projects, such as acquisition of another business;

evaluating the financial impact of new business ventures;

negotiating loan or overdraft terms with company bankers;

creating solutions to new financial challenges by applying financial or treasury knowledge;

liaising with other departments, such as tax and accountancy, on a range of issues;

providing advice on financial matters impacting on the company as a whole;

taking responsibility for, and supervising the work of, more junior members of staff;

liaising with bankers and investors and maintaining positive working relationships;

keeping up to date with financial and industry developments;

attending board and senior management meetings;

making presentations to the company board on specific financial issues.

Risk Policies
A treasurer will formulate a set of board-approved policies that define the methods allowed to manage
the above risks and the discretionary powers of the treasurer and other authorized personnel. These
policies will vary from company to company. Not all companies, for example, allow treasurers to
use derivatives or to leave risks unprotected, or they may only allow such practices within defined
limits and terms. (The Barnyard Basics of Derivatives explains the complex world of derivatives.)
The treasury department's actions and its compliance with treasury policies must be assessed
independently and regularly by the internal audit department and by a treasury committee comprised
of senior management, including the treasurer. This committee, or an asset and liability
committee (ALCO), will also regularly review and discuss financial risks across the company's assets
and liabilities, and agree on appropriate actions to manage or transfer them. ALCOs will usually
delegate the task of executing agreed-upon actions to the treasurer and his or her team.
When there is no single obvious solution to managing a financial risk, a treasurer must be able to
weigh the pros and cons of a course of action. Decisions may involve consulting relevant internal and
external specialists and undertaking data analysis and possibly scenario analysis in order to
recommend a course of action. (For related reading, seeScenario Analysis Provides Glimpse Of
Portfolio Potential.)
Professional Development
Traditionally, many treasurers were trained as accountants and undertook treasury activities as an
offshoot to their accounting roles. However, with the development and proliferation of financial
instruments and the globalization of financial markets and companies, treasury management has
become more specialized, complex and time-consuming. Large and multinational companies establish
treasury departments as autonomous risk management units, and corporate treasury management is
now recognized as a profession distinct from accountancy. Many countries have specialized
professional bodies, such as the Association of Corporate Treasurers in the U.K., as well as
specialized education programs. (To read more about careers in accounting, see Accounting, Not Just
For Nerds Anymore.)

Specialist and Generalist

Although a treasurer is essentially a risk management specialist, his or her performance is enhanced
by having a practical knowledge of various associated corporate support functions such as law, tax,
insurance, accounting, economics and banking. In these areas, the corporate treasurer is also a
generalist.
Because financial risks come from various sources within a company (such as interest rate risk in
loans, credit risk in investments, or currency risk in debtor invoices), a treasurer must understand the
nature and financial dynamics of each of a company's assets and liabilities across many different
departments, underscoring the benefit of a broad financial education. (For related reading,
see Keeping Up With Your Continuing Education.)

Interpersonal Skills
In addition to consulting relevant internal colleagues, a treasurer will often execute the actions to
manage financial risks only after also consulting with external specialists such as bankers, lawyers,
credit rating agencies, tax and accounting consultants, and auditors. A glance at any tombstone will
confirm the wide range of specialists involved in raising debt or equity, for example. Strong
interpersonal and communication skills are therefore an important personal attribute for a treasurer.
Senior Manager
The impact of financial risks on company value and survival can be catastrophic and sudden. The
treasurer, along with perhaps a small team consisting of a treasury accountant, cash manager,
treasury analyst and dealer, are entrusted with a great deal of responsibility. As such, a treasurer is
often a member of a company's senior management team, usually reporting directly to the CFO or
even commanding a seat on the board of directors.